I applied for a Quicken home loan in May, I got the fabulous rate of 11.4%, I still haven't found a house yet, but was messing around on the internet last night and ran across Indy Mac, I applied for a loan and was approved. My rate still sucks, but they are offering me a flat 10%, it may not be much of a change with what Quicken has offered, but 1 1/4% on this high of an interest rate is a really big deal. I have been denied by everyone and I guess what I would like to know is, should I just go for the Indy Mac loan and refinance it in a year or so? I am tired of all this and just want a home loan. Thanks!
You may want to consider finding a mortgage broker - he/she would have access to loan products from a wide range of lenders. I think this is the only way that you can be confident that you got the best rate possible. If you have a buyer's agent already then he/she can probably give you referral. Also, I know that with auto loans for people with credit problems dealerships often can find better financing than individuals can find on the web. You may find the same thing with regards to home loans. What kind of credit problems are you dealing with? A brief description of the problem and an idea of where your scores are would probably help people to offer opinions on whether a 10% is "good" for you situation.
Find a local mortgage broker and sit down face to face and go over the details. Don't rely on the internet with the problems you have. I believe you will do better. Good Luck.
What really sucks about this is I have two loans with Ford Credit one at 2.9% and one at 7% and then have to pay this on a home. We have a BK7 discharged in '97, we had some doctor and hospital bills go to collections after the bk, they are all paid except one or two. We were really stupid after bk and had 2 chargeoffs, one with Providian and one with Capital One, both paid. In the 2 years that we have really been re-establishing our credit (and when we finally figured out that this crap will hurt you for years and years) we have never had a late payment on anything, ever. Our Experian scores are pretty bad, his is 550 and mine is 518. Our TU and EQ are right at 600 for both of us. Our TU and EQ reports are pretty good with only a paid collection or two each. All the stuff we got off EQ and TU is still on our Experian reports, I have been dealing with Experian for 3 years now and that stuff just won't come off. The loan is for $98,000, of that we pay 5% down. There are a lot of closing costs and "points" that are making our closing costs really high. I just don't know what to do. I don't even know where to find a mortgage broker, we are in a small town and I don't know of any here.
You can probably find a mortgage broker in the closest big city, they don't have to be in your back yard to be able to help. If you do take a crappy loan, watch the prepayment penalties. Make sure you can get out of it in a year without paying extra interest.
Have you called around? If you only need a 95% LTV loan you can get a much better rate I think. We recently got 6.3% on a 95% loan and we have 2 med. collections on our reports. I would call around to all your banks and lenders and check rates with them. Tell them your situation and see if they can kind of preliminarily tell you if they can help. If you find one, then you can apply and let them start the process after that. If you end up going with Indy Mac just make sure you don't pay ANY points to get a 10% rate. Good heavens that's 4 points above prime and you shouldn't have to pay to get that! Also, be sure that there's no Prepayment Penalty clause in there or you won't be able to re-fi in a year or whenever you qualify for a better rate. And be absolutely certain that you check every word of that contract and every figure so that you don't get stuck with credit/disability insurance or any other creative program they've come up with. Watch 'em because they won't disclose it to you UNTIL you sit down to close and you see it in the loan paperwork. If they offer you bi-weekly payments and you choose to do that, just make sure they don't charge you for the convenience. It's a buyers market out there and the rates/approvals are very customer friendly! Good luck! Lisa www.IBeatBeneficial.com
Re: Have you called around? If the scores you got from experian and TU are correct (the scores lenders get from these two are usually different) then lenders would use your middle score - a 600 - to qualify you. THat's not *that* bad. You will likely have to pay off the one or two outstanding collections. Are you a first time homebuyer? What about an FHA loan? They aren't score driven, and only require you to have had perfect payments for previous two years. That would surely be below 10%. Your county/state Dept. of Housing probably has special first time buyer programs that may be lenient on credity. Do a search on this board for user: fla-tan He's a mortgage broker who has posted some good information in the past, and I think works with borrowers in many states.
I would take everyones advice and go to a mortgage broker. They can search for you and find programs for someone in your credit situation. I bought our home in 96 after a chap 7 discharge in 1991...we went thru Bank of America and got a 8.5% rate and for that year that was about average. I think you can do much better then 10%! BOA only wanted a letter of explanation for our bankruptcy and in our case our credit was perfect since the discharge. I guess that was something in our favor Look around before taking such a high rate. And, make sure there are no points! And no prepayment penalties since you may want to refinance in the future once your credit is much better and the rates are better for you. Good luck!
Have you looked at FHA mortgages? They are not score driven but, require 2 years of clean credit post bk and, all collections paid. But, you will get conventional rates.
Both Quicken and Indy Mac have FHA backed loans, does anyone know why I am not being offered a lower rate if they are backed by them? Thanks.
What state are you in? Have you checked into what programs your state/local municipality's Dept. of Housing and Comm. Dev. may have available? Sometimes there are income limitations, however they are usually not so score driven and just want to see that you are current on all your obligations. cariba
iamsamiam The problem you are running into is the negatives post BK. With a conventional mortgage, there can be absolutely ZERO negatives/collections/chargeoffs after going BK. I have seen this many times and every conventional lender that I deal with is exactly the same way. If you are in the process of getting your remaining negatives removed then you may be able to qualify for a better rate, but not at this time most likely. I do know of a couple of consonforming lenders that may be willing to lend you, but I don't know what rate range you would be in without knowing alot more. Good luck in both your mortgage quest and in the house hunting. fla-tan
flatan, Can I email you? I probably just did something really stupid and did an application with Lending Tree.
Ask about doing a 80/15/5. the 80% will be at a decent rate as it's a nodoc basically the 15% will be at a higher rate but it's for so much less and you pay it off quickly the 5% is your down payment. You need a creative mortgage broker. You need someone who can help you figure out how to get around your credit... and if you have any post bk issues that can be cleared.. start getting those letters... brokers can do a rapid rescoring for you if your credit report isn't correct... but I'd quit applying online... and start interviewing brokers. Tell them the situation and get their opinions before hiring one...
I just spoke with my loand officer, she said she couldn't do it from her department without at least 15% down, she has sent our loan package over to the FHA department, I have no idea what that means. I asked her if that meant lower interest and she said probably, but she did say I could probably get away with 3% down and much lower closing costs. Is this what I am needing?
Thanks, but I just got approval, they sent me to the FHA department and I got a loan for $100k at 6.2% with 3% down. I am so thrilled I cannot stand it. We are in a small rural aread and $100k buys a house in the very best part of town. Finally, I achieved something. It has been a long hard road here.
((((((((((((((iamsamiam))))))))))))))))), wowOwowwwwwww, congrats to you! It is YOUR day. How great did it feel to read the word approved! LOL LOL Sassy
Ahh, thanks so much. That means a lot to me. This is proof that it can be done. My average credit score was 600 and my husbands was 580, we do have many baddies between he 3 reports on each of us, but this could only happen because we have never had a 30 day late, in the last 3 years. I am not real sure what they are going to have us do on the collections, but my name is being taken off the mortgage and it is going in my husbands name only. Mainly because I have the majority of the unpaid collections and most of the credit cards/loans. Our debt ratio was too high and I wasn't going to spend that much money getting some of these things cleared up, I just wanted a house. Our payments went from $989 on the Quicken loan, to $627 on this loan, and that is for the same amount. This truly is a good day and I thank everyone for all the advice I have received here. Thank you sassy for all your support in the other matter.
